Returning to baseball after the war, Houk eventually reached the major leagues, serving as the Yankees' second- and third-string catcher behind Yogi Berra. A right-handed hitter, Houk appeared in only 91 games over eight seasons (1947–54), finishing with a batting average of .272. Although the Yankees participated in six World Series during that period, Houk had only two Series at-bats (one in 1947, the other in 1952), batting .500.

Houk's last years as an active player were actually spent as the Yankees' full-time bullpen coach, thus beginning his managerial apprenticeship. In 1955, he was named manager of the Yanks' AAA affiliate, the Denver Bears of the American Association. Following three highly successful seasons at Denver, Houk returned to the Bronx as Stengel's first-base coach from 1958 to 1960. From late May through early June 1960, Houk served as acting manager of the Yanks for 13 games while Stengel, 70, was sidelined by illness. (The team won 7 and lost 6.) Then, after the Yanks lost the 1960 World Series to the Pittsburgh Pirates — and with Houk one of the hottest managerial candidates in baseball — the Yankees "discharged" Stengel (to use Stengel's own words) and promoted Houk.

Houk was known as a "player's manager" — albeit one with a quick temper. Tommy Lasorda, a Baseball Hall of Fame manager, briefly played for Houk at Denver and called Houk the best handler of men he ever played for, and modeled his managerial style on him.[3] The Kansas Sports Hall of Fame, of which Houk is a member, describes Houk as "rough, blunt and decisive" and his tantrums in arguments with umpires earned him 45 ejections as a manager in the majors. Houk is tied with another former Yankee pilot, Billy Martin, for fourteenth place on baseball's "most ejected" list.[4]

Houk moved into the Yankees' front office as general manager on October 23, 1963,[5] replacing Roy Hamey, and Berra, at the end of his brilliant playing career, became the Yanks' new manager. Yogi would win the 1964 pennant after a summer-long struggle with the Baltimore Orioles and Chicago White Sox, but Houk and the Yankee ownership quickly became disenchanted with Berra's work and in mid-season they made up their mind to fire him. After Berra's seven-game loss to the St. Louis Cardinals in the 1964 World Series, Houk sacked the Yankee legend.

Ironically, to succeed Berra, he then hired Johnny Keane, who had just resigned as manager of the champion Cardinals. Houk had admired Keane as a competitor in the American Association from almost a decade before and according to author David Halberstam, the Yankees had made overtures to Keane during the 1964 regular season about becoming their manager for 1965.[6] But the great postwar Yankee dynasty was aged and crumbling, the farm system had seriously deteriorated, and the Kansas City Athletics were no longer a reliable source for Major League talent. Keane, a longtime minor league manager, was better suited by temperament for managing young players than established and aging superstars, and his hiring was a failure. The team fell to sixth in 1965 and had won only four of the first 20 games of 1966 when, on May 7, Houk fired Keane and named himself manager.

Houk was eventually succeeded as general manager by Lee MacPhail and then began a second, and far less successful, term as Yankee manager, finishing the 1966 season. Their talent and farm system both depleted, the Yankees finished in last place for the first time since 1912. A long rebuilding process followed, including Bobby Richardson's retirement (following roommate Tony Kubek's retirement from a bad back after the 1965 season) and the trading away of Maris and Clete Boyer.

Houk would continue to manage the Yankees from 1967 until 1973. His best season was 1970, when the Yanks won 93 games, but finished 15 games behind the eventual World Series Champion Baltimore Orioles. He worked for George Steinbrenner for one season, in 1973, and was the Bombers' manager during their final game in 1973 at the "original" Yankee Stadium prior to its closure for two years for renovation.

After the final game of 1973, he resigned as manager. While Steinbrenner's commanding style has led some to think the new owner influenced his retirement, he told Bill Madden of the New York Daily News it was the constant booing of Yankee fans that pushed him. Houk even said that Steinbrenner insisted he'd get some new players to restore the team's greatness. "And he did, bringing in Catfish and Reggie, " Houk told Madden in the sportswriter's book Pride of October. "That'll make you good in a hurry!"

After Houk left the Yankee organization, he became the manager of the rebuilding Detroit Tigers. His 1975 team lost 102 games, but the 1976 Tigers improved their record by 14 games behind the heroics of rookie pitcher Mark Fidrych, who won 19 games while becoming a national sensation. By 1978, Houk had restored Detroit to respectability and its first winning record since 1973, bringing to the majors future stars of the Sparky Anderson Tigers such as Lou Whitaker, Alan Trammell and Jack Morris. After an 86-76 season, Houk retired.

Since the late 1950s, Houk and the Boston Red Sox had flirted over their manager's job. After two years of retirement, in the autumn of 1980, Houk, now 61, was ready to get back into baseball. When the Red Sox called about their open managerial post (they had fired Don Zimmer), he jumped at the chance.

Although not as daunting as his Detroit assignment, Houk faced another rebuilding job: the powerful Boston team of the 1970s was about to lose marquee players such as Carlton Fisk and Fred Lynn and needed to retool its roster. But Houk rose to the challenge, and in four seasons produced three over-.500 teams. On his watch, Boston broke in young players Wade Boggs, Roger Clemens, Bruce Hurst and Marty Barrett. When Houk retired from managing permanently in October 1984, just after his 65th birthday, he bequeathed the core of another pennant winning ballclub (in this case, the 1986 Red Sox) to his successor, John McNamara.

His final record, over 20 years with the Yankees (1961–63, 1966–73), Tigers (1974–78) and Red Sox (1981–84) was 1,619 wins and 1,531 losses (.514), plus eight wins and eight losses in the World Series. After his first three championship seasons, he never appeared in the postseason.

Houk served with the Minnesota Twins as a special assistant to general manager Andy MacPhail, Lee's son, from 1987 to 1989 before retiring from the game for good.[5] He thus enjoyed one additional world championship season, when the Twins defeated the Cardinals in the 1987 World Series.

Colorful opinions about Houk can be found in Jim Bouton's classic 1970 memoir, Ball Four. Houk was Bouton's first major league manager and sparred with him over contracts when Houk was the Yankees' GM.

He died in July 2010 in Winter Haven, Florida. At age 90 he was, at the time, the oldest living manager of a World Series-winning, pennant-winning or post-season team. He was survived by a daughter, Donna; a son, Robert; four grandchildren and 10 great-grandchildren.

On July 22 the Yankees announced players and coaches would wear a black armband in Houk's memory on the left sleeve of their home and away uniforms for the remainder of the 2010 season.[7]